Saab says it has signed a Memorandum of Understanding with Jinhua Youngman which will see the Chinese car maker invest £215 million in a Manufacturing Joint Venture (MJV) with the Swedes.
The new company is expected to build the new-generation 9-3 range in China from late next year, as well as using Saab technology to create a new domestic Chinese brand. Youngman already builds its own-brand cars and makes MAN commercial vehicles under licence. It is also the biggest bus builder in China.
The deal comes just weeks after Saab signed a Distribution Joint Venture (DJV) with Pang Da, one of China’s largest distributor and dealer networks.
According to Saab, the MJV ownership will be split 45/45/10 between Saab, Youngman and Pang Da. The DJV will be split 34/33/33 between Pang Da, Saab and Youngman.
Youngman will also be buying 29 per cent of Saab’s parent company Spyker and can nominate two board members to the Spyker board.
Pang Da’s 24 percent share of Spyker remains unchanged, but the company has upped its investment to £96m. Pang Da has already pre-ordered 3000 Saabs for delivery to China this autumn.
Victor Muller, CEO of Spyker and Saab said, "This MOU not only shows the belief of Pang Da and Youngman in our products for the Chinese market, it also is a step that significantly strengthens Saab’s financial position and would secure the mid and long term financing of Saab Automobile."
The deal has yet to be given the green light by Chinese authorities, but these investments, access to the booming Chinese market and access to enough cash to keep Saab’s production lines running until the new 9-3 arrives in September 2012, could give the Swedes the breathing space they need to reach critical, and profitable, mass.